Trinidad energy, high global prices and shrinking output volumes

Trinidad energy, high global prices and shrinking volumes affect investors’ confidence

October 9 2026

Dave Dookie, CEO

• Trinidad energy: Brent is above US$100, but local production continues to decline to about 54,000 barrels of oil per day and 2.4 bcf/d of gas. Gas shortages have forced several Point Lisas plants, including Nutrien’s and Methanex’s, to shut down or idle. Relief is not expected until Aphrodite and Manatee begin production in 2027.

• Global equities: Over the week the S&P 500 rose 1.17% and the Nikkei 225 rose 1.06%, and the FTSE 100 gained 0.86% on the strength of its energy stocks. Continental Europe fell, with the Euro Stoxx 50 down 1.04%, and the Shanghai Composite lost 1.92%.

• Caribbean equities: The TTSE Composite fell 1.08% to 1,007.69, with 16 decliners against 4 advancers. Scotiabank led the gainers, while Guardian Media and Ansa Merchant Bank each fell almost 12%.

• Trinidad bonds: The USD curve is steep. The 2027 bond trades above par, but every bond from 2030 onward trades at a discount, with yields rising to above 7.1%. In the local market, the GORTT 4.25% 2037 dropped TT$4 to TT$76.00.

• The 2038 discount: The 6.20% 2038 trades near 92.60 to 93.20 for four reasons: US Treasury yields above 5%, inflation risk from oil, credit concerns (falling production, a split BBB-/Ba2 rating, and a 4.6% of GDP deficit), and caution ahead of the budget.

Trinidad and Tobago enters budget week with high oil prices but falling output. Brent closed near US$104.72 amid Middle East supply constraints; the US EIA expects about US$105 in the fourth quarter before easing to roughly US$84 in 2027. The Energy Chamber reports first-half 2026 crude output of about 54,000 barrels per day and May gas production of 2.4 bcf/d, down from 4.3 bcf/d in 2010. The shortfall has hit Point Lisas, prompting Nutrien’s indefinite nitrogen shutdown after Proman’s restructuring and Methanex’s July idling of its Titan plant.

Budget priorities:

Monday’s 2026/2027 budget is now the main focus. The Energy Chamber is calling for:

·        reform of the Supplemental Petroleum Tax;

·        improved capital allowances;

·        payment of outstanding VAT refunds; and

·        a clear fiscal regime for imported gas.

These measures could support a recovery in production from 2028.

Supply outlook

Relief is expected to begin in 2027. Shell and NGC resolved the Aphrodite pricing dispute in September, with first gas targeted for the second quarter of 2027. Shell’s Manatee field is also scheduled to begin production in 2027.

Global markets: US and Japan lead, Europe lags

Index	Closing Values	Weekly Change
S&P 500	17,525.23	+1.17%
Nasdaq Composite	27,366.17	+0.64%
FTSE 100	10,552.05	+0.86%
Euro Stoxx 50	6,173.37	-1.04%
DAX	25,087.27	-0.57%
CAC 40	7,803.33	-1.19%
Nikkei 225	69,030.92	+1.06%
Hang Seng	24,211.35	+1.00%
Shanghai Composite	3,813.79	-1.92%
TTSE Composite	1,007.69	-1.08%

In the US equity market, last week the S&P 500 gained 1.17% and the Dow 0.93%, helped by reports that OpenAI expects annualised revenue of at least US$70 billion by year-end. Tesla (+3.27%) and Alphabet (+2.38%) rose, while Micron (-4.27%) and Nvidia (-2.00%) took profits. Bonds stayed weak, with the 10-year yield at 5.24%.

Across in UK and Europe, the FTSE 100 added 0.86% on its energy weighting, with Shell up 5.48% and BP 3.26%. The Euro Stoxx 50 fell 1.04%, dragged by Italy's FTSE MIB (-1.46%) and the CAC 40, though TotalEnergies rose 5.47%.

In Asia, the Nikkei 225 rose 1.06% and is up 42% over a year. The Hang Seng gained 1.00%, but the Shanghai Composite fell 1.92%.

Caribbean: TTSE slips before the budget

The TTSE Composite fell 1.08% to 1,007.69 (+6.47% year to date), with 16 decliners against 4 advancers; the All T&T Index lost 1.28%. Volume rose 18.23% to 1.79 million shares, but value fell 44.61% to TT$8.47 million, with Massy accounting for 47.08% of shares traded. Scotiabank (+1.70% to TT$48.39) led gainers ahead of its TT$0.70 dividend on October 13, while Guardian Media (-11.76%) and Ansa Merchant Bank (-11.75% to TT$25.00) led decliners. Excess bank reserves rose about TT$849 million to TT$4.805 billion.

The USD curve is steep, the 2027 trades above par, but every bond from 2030 trades at a discount, with yields rising from about 5.4% to above 7.1% according to the pricing from international brokers. GORTT 5.20% 2027 traded at TT$101.80 for a 3.27% yield, while GORTT 4.25% 2037 fell TT$4.00 to TT$76.00, a 7.48% yield. Investors will lend short cheaply but demand far more to hold long government paper.

Trading in Trinidad and Tobago bonds

Government of Trinidad and Tobago’s Global Bond 6.20% 2038 sits near 92.60 to 93.20 because investors require about 7.1% a year, almost a point above its coupon. With roughly 11.8 years left and a duration near 8, that gap equals a discount of about 7 points.

This is due to; (i) higher US rates, the 10-year Treasury is at 5.24% and the 20-year at 5.66%, and long Treasuries are down 7.41% this year. A 6.2% coupon looks thin against a 5%-plus risk-free rate, (ii) inflation risk as brent crude is above US$100 raises the chance of rates staying higher for longer, which hurts long bonds most and; (iii) credit concerns.

The roughly 180 basis-point spread over Treasuries reflects falling output, plant closures, foreign exchange shortages and an IMF-projected 2026 deficit of 4.6% of GDP. S&P rates T&T BBB-, the lowest investment grade level, while Moody's has it at Ba2, implying a high yield. In the week ahead, a credible deficit path and real upstream incentives in Monday's budget could narrow long T&T sovereign credit spreads; heavy borrowing would increase them.

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